Santa rally this year?

[VAmanBulls]

Some may say we just had it. We just came out of the Oct bottom to reach the highs hit back in late July. The S&P did pretty good this year, but when you look under the surface, only a handful of stocks were responsible for the gains. Take away those stocks (magnificent 7) and the S&P was in negative territory this year. I think things look good for a seasonal rally this year in the last 2 weeks of December. And it may be worth the gamble as the S&P target price consensus estimates for next year in 2024 is 5,000. The estimates were pretty much on target for this year (so far). There are real reasons the markets tend to swell a bit in December so check it out. Stay motivated and ride that bull!

[mjedlin66]

It's too early for a Santa Rally

[bloobs]

It's too early for a Santa Rally

Yup, this is more of a seasonal rally before the actual rally. There is historically a lull/drop the first 2 weeks of December for most indices.

I never allow myself to have an opinion on anything that I don't know the other side's argument better than they do.
- Charlie Munger

[ProduceMan]

It's too early for a Santa Rally

Yup, this is more of a seasonal rally before the actual rally. There is historically a lull/drop the first 2 weeks of December for most indices.

I never allow myself to have an opinion on anything that I don't know the other side's argument better than they do.
- Charlie Munger

I guess this reply answers my question on “ why you IFTied today?”

[ProduceMan]

Some may say we just had it. We just came out of the Oct bottom to reach the highs hit back in late July. The S&P did pretty good this year, but when you look under the surface, only a handful of stocks were responsible for the gains. Take away those stocks (magnificent 7) and the S&P was in negative territory this year. I think things look good for a seasonal rally this year in the last 2 weeks of December. And it may be worth the gamble as the S&P target price consensus estimates for next year in 2024 is 5,000. The estimates were pretty much on target for this year (so far). There are real reasons the markets tend to swell a bit in December so check it out. Stay motivated and ride that bull!

Glad to hear from you again

What exactly is this magnificent 7?

[bloobs]

Magnificent 7:

Apple ( AAPL ), Amazon ( AMZN ), Alphabet ( GOOG) ( GOOGL ), Meta ( META ), Microsoft ( MSFT ), Nvidia ( NVDA ), and Tesla ( TSLA )

Large Cap Growth stocks which are driving the SP 500's present rally. The other 493, not so much (yet).

[Bubba]

The Santa Rally is usually the last few trading days of December and first couple of January. Note that there is no consensus on the exact days:

https://www.investopedia.com/terms/s/sa ... effect.asp

We'll see what comes our way. Some guys I watch are saying that we're going to have a drop of 5% or more over the next 2 weeks. Of course those same guys predicted the same right now...so who knows (apparently they don't). Just follow your seasonals.

[VAmanBulls]

Interest rates are retreating a bit, the GDP came in at 5.2% beating estimates and we are seeing a flatting of the yield curve. Hard to make a case for a recession anytime soon. I definitely feel we hit a resistance ceiling right now and I don’t see any spark to break thru it. More likely is a slight pull-back in the short term next two weeks. But who knows, right. December can be tricky and I think two main forces are at play. You have the institutional mutual fund managers that buy up chunks of stock in ‘winner’ companies so they can show they own them at the end of the year….”see we did own Nvidia in our portfolio Mr. Jones”’ Yeah but you bought it December 20th. (I also like ANET by-the-way but wait for a pull-back – not a recommendation of course). The other force I see at play is the ‘tax-loss harvesting’ that takes place. Basically selling a loser stock to offset the tax obligation of a winners stock you sold. What do you all think is behind the seasonal swell at the end of December?

[VAmanBulls]

I see a lot are finding harbor in the G fund right now. When are we all moving to the S or C fund for the December rally? We need a big finish!

[PhilJohn]

I see a lot are finding harbor in the G fund right now. When are we all moving to the S or C fund for the December rally? We need a big finish!

I was going to join the herd but I instead just tried to diversify the funds a bit. So far it's worked. Hope today means upswing here on out.

[VAmanBulls]

I'm really on the fence with my seasonal this December which has me going all in the S fund on Friday. The DWCPF seems to be pretty volatile rolling in almost a pattern of peaks and valleys. It seems to be approaching a top right now. Any gas left in the S fund next week you think? Somebody talk some sense into me.

[jatelle]

I am not a seasonal expert but prefer to focus my attention on Technical Analysis (TA) and Price Action (PA). From the TA perspective the S-Fund (IWM) and C-Fund (SPY) charts are very bullish with steady strong buying volume. SPY closed with fresh highs today. Both are respecting their Daily 9 EMA (very bullish) and are only slightly overextended (~2%) above their Daily 20 EMA. Furthermore, there is confluence with the VIX dropping to 11.81 (confirming the strength) which is its lowest since mid-November 2019. Although past performance is not a guarantee of future performance it can shed some light. In the same seasonal period of mid-November 2019 to mid-February 2020 (see chart) and with the VIX at 12, SPY rose +10%. So from the TA and PA perspective the pattern of higher highs and higher lows remains intact while sellers are struggling to gain any downside traction. One day at a time. But now J.POW is up to bat tomorrow so you just can never know... I hope this makes some sense to you

[Bubba]

According to many strats, people don't join the S/C/I funds until the middle of December. I'm curious to see how that time will go. Thanks for the posts Jatelle.

[VAmanBulls]

That's good information Jatelle. Helps to take the emotion out of your trade.

[PhilJohn]

Ohhh yeah!!!!

Now that I said that it will probably tank the last two hours.